Home News Factbox: Europe tries to soften blow of surging power and gas prices

Factbox: Europe tries to soften blow of surging power and gas prices

by jcp
gawdo

(Reuters) – Households across Europe face much higher energy bills this winter due to a global surge in wholesale power and gas prices and consumer groups have warned the most vulnerable in the region could be hit by a fuel crunch as a result.

Benchmark European gas prices have rocketed by some 280% so far this year, due to low stock levels, high demand in Asia, high carbon prices and outages.

Governments across Europe are coming under pressure to curb energy bills to help families and small businesses as economies slowly emerge from the coronavirus pandemic. Following are some of the measures the countries are considering:

EUROPEAN UNION

EU energy ministers are meeting on Sept. 22 to discuss Europe’s soaring prices, while a group of lawmakers has asked the European Commission to investigate the role of Russia’s Gazprom, saying the company’s behaviour has made them suspect market manipulation.

In response, Gazprom says it supplies its customers with gas in full compliance with existing contracts.

An EU official told national ministers on Sept. 22 the bloc’s executive arm was working on options to help member states manage record-high power prices.

FRANCE

The French government on Sept. 15 announced plans to make a one-off 100 euro ($118) payment to the 5.8 million households that receive energy vouchers.

GERMANY

Some 310,000 German households face a 11.5% increase in their gas bills, data showed on Sep. 20, while energy experts have warned some suppliers could go insolvent amid record wholesale rates.

Germany does not see a need for government intervention to counter rising gas prices, a spokesperson for the economy ministry said on Sept. 22.

Germany does not have a utility price cap. Its 41.5 million households buy their energy in a flourishing but mostly unsupervised retail sector that was liberalised to create choice and dismantle monopolies.

The Bundesnetzagentur (BNetzA), the country’s regulator, said it was not tasked with monitoring procurement strategies or pricing mechanisms at suppliers.

GREECE

Greece on Sept. 14 announced plans to offer subsidies to the majority of Greek households by the end of the year. This would include a 9 euros subsidy for the first 300 kilowatt hours consumed a month, higher one-off payments to low income earners and bigger discounts from the country’s main state-owned utility.

ITALY

Italy will introduce short-term measures, which could be worth some 3 billion euros, to offset the expected rise in retail power prices and is working on a longer-term reform of power bills, its energy transition minister said on Sep. 16.

PORTUGAL

Portugal’s environment minister Joao Matos Fernandes told a press conference https://www.portugal.gov.pt/pt/gc22/comunicacao/noticia?i=preco-da-eletricidade-nao-sobe-no-mercado-regulado-em-2022-afirma-ministro-do-ambiente-e-da-acao-climatica on Sept. 21 that electricity prices for domestic consumers in the regulated market would stay flat in 2022.

SPAIN

Spain urged the EU on Sept. 20 to devise guidance for its member states and suggested moves to limit carbon market speculators and build up gas reserves.

“We urgently need a European policy menu predesigned to react immediately to dramatic price surges,” Economy Minister Nadia Calvino and Energy and Environment Minister Teresa Ribera said in a document sent to the Commission.

Spain’s proposals also call for the establishment of a centralised European platform to buy gas.

The previous week, Spain had passed emergency measures to lower bills by redirecting 2.6 billion euros in extraordinary profits from energy companies to consumers and capping increases in gas prices.

BRITAIN

Britain is considering offering state loans to energy companies that take on customers from firms which go bust due to soaring wholesale natural gas prices, Business Secretary Kwasi Kwarteng said on Sept. 21.

The unprecedented jump in wholesale prices will force more British energy suppliers out of business and the industry needs to prepare for prolonged pain, energy officials and the business minister said on Sept. 22.

The country’s energy regulator Ofgem has raised the cap on the most widely used tariffs by 12-13% from October, after raising it in April due to high wholesale costs.

 

(Compiled by Tommy Lund, Sarah Morland and Dagmarah Mackos Editing by Nina Chestney and Mark Potter)

 

www.gawdo.com

You may also like